The shock departure of highly-regarded David Jones chief executive, Mark McInnes, was inevitable, given the nature of his transgressions. The surprise was how candidly he discussed their nature in his statement of resignation.
McInnes, the moment a formal complaint was made about his behaviour towards a female staff member at two recent company functions, appears to have realised that he had no option but to resign. If he hadn’t, the decision probably would have had to be made for him.
Apart from the reality that he had behaved improperly and unacceptably so, on more than one occasion, he was the CEO of a business that employs mainly women and whose customers are mainly women. The damage to relations with the employees and the brand damage by themselves would have dictated his fate.
Normally, however, a senior executive faced with similar circumstances would perhaps have attempted to resist the inevitable or else left quietly, hoping that the nature of their personality would remain a matter of conjecture and rumour.
It is to his diminished credit that McInnes has at least publicly stated the broad nature of his behaviour, accepted responsibility by resigning, recognised that he had failed not only the staff member involved but all his staff, his board, the company and his family.
McInnes’ serious misjudgments will carry a serious financial penalty. While he will get a $1.5 million payout, and his statutory entitlements, he has been forced to walk away from his incentive arrangements which, after seven years as an exceptionally successful CEO, would represent very serious money.
Perhaps the more severe penalty, however, is such an abrupt and unpleasant end to what had been a glittering career. Under McInnes David Jones had been transformed into a highly profitable, innovative, very disciplined and growing department store group.
He, finance director Stephen Goddard and the new CEO of David Jones, Paul Zahra, were a group of youthful executives recruited from Officeworks by former CEO Peter Wilkinson, who knew them from his time at Coles Myer when a small group of 30-somethings were given responsibility for launching a new big box format for office supplies. McInnes was only 37 when he was appointed to succeed Wilkinson.
The market will be somewhat surprised that Zahra, rather than Goddard, who is highly respected, has been appointed CEO. However, within the group there is a view that Zahra has special talent as a retailer.
He has worked across the spectrum of retail operations at Target (where he was the youngest store manager), Officeworks and, for the past 12 years, within David Jones where his most recent role was general manager for stores and operations. The fact that he was appointed instantly signals his board’s confidence in his ability to lead the group.
At least McInnes has left him with a very clean business, strong balance sheet, spruced-up store network and well-established brand-led retail strategy. While the circumstances may have been unpleasant and explosive, his elevation, despite them, shouldn’t be disruptive.